'Consolidated' team to manage Y-12, more starting May 1

A team headed by Bechtel National Inc. and Lockheed Martin Services Inc. has been selected to manage two of the nation's key nuclear weapons facilities — Y-12 in Oak Ridge and Pantex near Amarillo, Texas.

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By staff & wire reports

Oakridger - Oak Ridge, TN

By staff & wire reports

Posted Jan. 8, 2013 at 12:29 PM
Updated Jan 8, 2013 at 12:32 PM

By staff & wire reports

Posted Jan. 8, 2013 at 12:29 PM
Updated Jan 8, 2013 at 12:32 PM

OAK RIDGE

A team headed by Bechtel National Inc. and Lockheed Martin Services Inc. has been selected to manage two of the nation's key nuclear weapons facilities — Y-12 in Oak Ridge and Pantex near Amarillo, Texas.

The new contractor will be called Consolidated Nuclear Security LLC.

The National Nuclear Security Administration, a part of the U.S. Department of Energy, made the official announcement today and tout the potential savings to the government by consolidating management of the two production plants … even though they are in different states and 1,000 miles apart.

The team selected for the job has considerable experience in the DOE contracting world, and both Bechtel and Lockheed Martin have deep roots in Oak Ridge. ATK Launch Systems, a defense and aerospace company with headquarters in Virginia, is also part of the winning team.

Bechtel currently shares the management role at Y-12 in a partnership with Babcock & Wilcox; B&W Y-12 LLC has held the Oak Ridge contract since 2000.

Bechtel also has been involved in the partnership that manages Pantex, where nuclear warheads undergo their final assembly and their initial disassembly after being retired from the arsenal.

Lockheed Martin (or its predecessor Martin Marietta) managed Y-12 for 16 years, from 1984 to 2000.

Today's NNSA announcement culminates years of study and a procurement process that took about two years. Competing teams reportedly spent millions of dollars to prepare their proposals — and update them on multiple occasions to meet changing requirements — for managing national security facilities that form the production base for the nation's nuclear deterrent.

In part, an NNSA release states the latest move "shapes the future of the United States' nuclear security enterprise and will save $3.27 billion in taxpayer dollars over the next decade."

The contract also includes construction project management of the multi-billion dollar Uranium Processing Facility at the Y-12 Plant in Oak Ridge, and an unexercised option for Savannah River Tritium Operations at the Savannah River Site near Aiken, S.C., the release stated.

"Our nuclear production capabilities are critical to our national security," said NNSA Administrator Tom D'Agostino. "And this contract puts NNSA in a position to improve mission delivery by generating significant savings that will be reinvested to improve safety, security, quality and infrastructure.

"This award will have a lasting impact on NNSA for years to come. It is the culmination of years of hard work focused on continuously improving the way we operate, saving taxpayer dollars and aligning ourselves for the future."

NNSA Principal Deputy Administrator Neile Miller added: "We found a strong, experienced partner in CNS. Their team — and the leadership and capabilities they bring with them — are an exciting addition to the NNSA family.

"Their focus on continuously improving while driving for cost efficiencies helps us plan for the future while ensuring that we're delivering on our commitments to our partners."

Page 2 of 2 - Consolidated Nuclear Security will take over NNSA's mission activities under the new contract starting May 1, 2013. The base term of the contract is five years, with options that may extend the term up to an additional five years.

"To be eligible for continued performance beyond the fifth year, CNS will be required to deliver on promises made in its proposal regarding efficiencies and to continue to meet mission and other contract requirements consistently," the release stated.

"If NNSA's option for Savannah River Tritium Operations is exercised at the end of Year One, the contract includes a total available fee of approximately $445 million to manage the three sites for DOE and NNSA work — depending on CNS' quality of performance.

"CNS may also earn up to an additional $263 million as their share of savings, though CNS cannot share any savings related to employee benefits."

As mentioned earlier, Consolidated Nuclear Security will also be responsible for designing and overseeing construction of the new Uranium Processing Facility at Y-12, though NNSA hasn't determined who will ultimately build the facility.

"Together, Pantex, Y-12 and Savannah River are integral parts of NNSA's nuclear production efforts — delivering products and services focused on surveillance and maintenance of the nation's nuclear weapon stockpile," the release concluded. "Each site provides unique capabilities in areas such as high explosives, precision machining and tritium production.

"Additionally, CNS will be responsible for the integration of production activities across the Nuclear Security Enterprise (NSE)."

NNSA says the proposed single contract award will further strengthen its ability to move toward a fully integrated and interdependent enterprise which will enhance mission performance, reduce costs, strengthen partnerships and improve stakeholder confidence.

Specifically, NNSA laid out four objectives that will be met through this contract. They include:

• Improving performance in the completion of national security missions for nuclear production operations;

• Transitioning and merging operations at geographically dispersed centers of excellence for nuclear weapon assembly/disassembly, enriched uranium, high-explosive production and tritium supply management under a single contract;

• Reducing the cost of performing work; and

• Requiring actions that support operation as an integrated DOE/NNSA enterprise.

The newly formed NNSA Production Office will have the primary responsibilities associated with administering the contract.